By Kirk Maltais
-- Soybeans for January delivery fell 0.5% to $12.61 1/2 a bushel on the Chicago Board of Trade Monday, with concerns affecting the wider markets weighing down grains for most of the day.
-- Corn for March delivery fell 0.1% to $5.83 1/2 a bushel.
-- Wheat for March delivery rose 0.3% to $8.06 1/4 a bushel.
HIGHLIGHTS
Get Out of the Way: Concerns about inflation and the Federal Reserve's approach toward it have sparked a dumping of long positions in grains, a trend continued for much of the day Monday. The CFTC reported in its latest commitments of traders report Friday that managed money firms cut their corn longs by over 38,000 contracts, while soybeans longs were cut by over 9,000 contracts and combined wheat longs were cut by nearly 12,000 contracts.
"CFTC data on Friday showed the managed money spec funds hastily exiting some of their net long futures position at month end," said Alan Brugler of Price Futures Group.
Key Area: Grain futures pared their losses for the day late in trading Monday with wheat turning higher. The uptick seen in wheat came as Russia builds up its troops at the Ukrainian border, with the threat of hostilities happening in a big wheat exporting area.
"Presidents Biden and Putin will be talking Tuesday, but most sources doubt that Putin will back down," said AgResource. "Sanctions will likely include the world banking system and some ban on ag/energy exports."
Follow the Leader: The weakness seen in other assets were the key to pressure on grains this morning.
"Prices [are] being negatively affected by the weakness in the equity markets and the cryptocurrencies and likely some profit-taking from the runup on Friday," said Tomm Pfitzenmaier of Summit Commodity Brokerage. Over the weekend, prices for bitcoin shed as much as 20%, according to data from CoinDesk, although they have since recovered some of that loss.
Unease over the Omicron variant and unease over inflation are seen as factors pressuring that market.
INSIGHTS
Standing Ready: With the USDA's next WASDE report due Thursday, grains traders are getting themselves in position ahead of the report, says Karl Setzer of AgriVisor.
"Typically the December WASDE data receives little attention as only the demand side is updated in the domestic balance sheets," said Mr. Setzer. "This year may be different though as trade has placed elevated interest in all balance sheet updates for the past year regardless of their historic tendencies."
Analysts surveyed by The Wall Street Journal forecast that stocks of soybeans and wheat in the U.S. are going to be higher in this month's WASDE report from the USDA versus last month's report.
In Protest: The EPA's latest proposal to extend the deadlines for compliance dates under the Renewable Fuel Standard program sparked some protests from groups representing the renewable fuels sector.
"What we see is an admission that EPA will miss the statutory deadlines going forward, while making it easier to do so," said Kate Shenk of the National Biodiesel Board. "EPA is acting as if there is no statutory deadline for promulgating annual rules."
Grains traders were looking for the EPA to release its new rules last week, and the lack of any new rules being released put pressure on corn and soybean futures.
Slight Move: Inspections of U.S. grains slipped slightly from the previous week, according to the USDA. In its latest weekly grain export inspections report, the USDA said for the week ended Dec. 2, inspections of corn totaled 758,169 metric tons, soybean inspections totaled 2.25 million tons, and wheat inspections totaled 245,963 tons, all slightly lower than last week's inspections.
China continues to be the main destination for U.S. soybeans, totaling over 1.4 million tons for the week, according to the USDA.
AHEAD
-- The EIA is scheduled to release its weekly ethanol production and stocks report at 10:30 a.m. EST Wednesday.
-- The USDA is due to release its weekly export sales report at 8:30 a.m. EST Thursday.
-- The USDA is scheduled to release its monthly WASDE report at noon EST Thursday.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
12-06-21 1536ET
